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As Paradigm Shifts Focus, the Old-Guard Culture is First to Go

TORONTO, June 11 - In April, John Hamer, interim president and CEO of Paradigm Genetics, handed down a company-wide edict that asked researchers to refocus their efforts on the firm in general rather than on individual departments or divisions in particular.


Hamer's goal, he said at the time, was to "create an opportunity for the scientists to be much more aligned with our business." The result, at least initially, was a 20-percent reduction in workforce and a small army of lab coats nursing their jaws off the floor. "It was a bit of a shock," said on long-time staffer.


Having recently shown founding CEO John Ryals the door, the company, with its two divisions in a tangle of archaic managerial fiefdoms, wanted to purge itself of his ghost.


Now, more than two months after cleaning house, Research Triangle Park, NC-based Paradigm appears to have its collective head on straight again, and even expects to close a pair of research collaborations with "major biopharmas" before the end of the year.


"It's a little too early to tell" how the restructuring has played itself out, Hamer said in an early-morning interview with GenomeWeb today. "But my sense is it's working out pretty well."


To be sure, the company is still looking for a permanent CEO (Hamer swears he's not about to been named and said he hopes to give an offer to someone next month) and it has not ruled out a second restructuring.


GenomeWeb caught up with the Toronto native during the BIO 2002 meeting here.


GenomeWeb: It's two months since you laid down the law. How have the troops been handling it?


John Hamer: It's going well. The scientists have adjusted to it quite well. For a while we had some groups that didn't know which side they were on [ag-bio or health care]. We found that the cultures [of ag-bio and health care] are a bit different. On the health-care side, for example, they're more on a research-project mindset now whereas the ag guys have got Monsanto deliverables, Bayer deliverables.


GW: Did you encounter obstacles during the restructuring for which you hadn't factored?


JH: No. I think they now have a much cleaner understanding of what they've got to do. Before, they were organized into departments. And you'd ask them, 'What do you want to do?' And I think the trigger for me [to initiate the change] was seeing people writing in their annual reviews that they want to grow their department. And I'd ask, 'Well, why is that a goal?'


I began to see that being part of a department started being really meaningful to them. I think they developed the idea that if you have a department then you want to grow that department, whereas in a business group you want to grow your business. So it was a matter of getting the scientists more into an alignment of thinking, 'What is our business?' and 'What do we have to do as a business to get this done?'


And people would say to me, 'You shrunk my department.' And I'd say, 'So what? The company's doing better.' So it was getting them to sort of think 'corporately' a little bit more and to get them to keep in mind the overall mission of the company. I wanted them to stop thinking about their titles and their department: 'I'm a senior assistant scientist in the gene-expression group.' No. You're a scientist in a business group of Paradigm Genetics.


GW: Do you think that kind of culture led to wasteful overhead that eventually caused the job cuts in April?


JH: Not really. What it led to is a sort of entrenchment around the notion of 'This is my area.' And that eventually leads to, 'Oh, I don't do what you do. We don't do that here. That's what they do.' We were starting to see that, and I think this kind of structure helps to get rid of that.


I think the best place we can see [the product of this change] is on the ag side, where all of a sudden things that took months and months to get coordinated with a partner can happen in a week. This is because you absolutely know who is in charge of that project, that person absolutely knows the project, and the project team all report to that person.


GW: The last time we spoke, when you announced the start of these changes, you said the health-care side might see some investment in a month or two. It's now a month or two. How is health care fairing?


JH: You know, we're still clearly an ag-biotech company. We're not running away from that in any sense. In terms of the health-care side of the company, when Paradigm came together we realized we'd be putting together technologies, some of which were well known: gene-expression analysis and phenotype analysis. But we also realized there are certain technologies we were going to build that would have applications beyond ag. And what should we do about that?


Metabolic profiling, for example, and the kinds of software tools and the ways of handling very large data sets were all some things that we got good at and realized that they also have value in health care. So that's really why that health-care group was formed: to take the technologies we've built on the ag side and begin to ask, 'How can we shape this so that someone in a health-care company could understand it?'


GW: At what stage is that goal?


JH: Well, we have a unique technology that we need to incubate, develop, and make sure it works. We understand our limitations. We're not suddenly going to have rats and mice and patients. That's where our collaborations come in. I think there was some perception out there that we were going to become a drug company. That's not the case. From the very beginning of Paradigm, we wanted to develop technologies that serviced a number of industries. And we still see that. We've been very successful at ag and that's always going to be our strength.

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